Planned university fee hikes despite slide in disposable personal income

Median average wages and household incomes have yet to show any meaningful rises even as inflation is at a five year high, but private universities have announced their intention to raise university fees come April by significantly large amounts.

The unemployment rate has remained unchanged in the past year and firms in Japan are getting picky when hiring new graduates, using innovative new hiring techniques. Although about 81.7% of university students graduating in spring 2014 have been given at least one informal job offer by Oct. 1, 5.5 percentage points higher than last year’s rate, according to Recruit Career(Source: Nikkei, Nov 27, 2013), top firms have also indicated they will be hiring fewer, not more, graduates in 2014 (see Fujitsu’s statement “the number of new hires will decrease compared to this year due to the severe business environment…”(Source: “Fujitsu to hire 500 graduates in 2014” Japan Today Mar 3, 2013). Since it is still unknown whether the slight improvement in graduate hirings over the past year will be sustainable in the future, should private universities be raising fees when they have not proven they have added value to their course programs nor raised teaching standards, nor that they are graduating more employable graduates.

Are university administrators and authorities even aware that they have not addressed the many criticisms about the state of/quality of higher education in Japan? Or have the rankings of all of the universities planning fee hikes risen notably in international rankings to justify the fee hikes?

Average wages in Japan increased to 310.85 JPY in November of 2013 from 297.41 JPY THO in October of 2013. Wages in Japan is reported by the Ministry of Health, Labour and Welfare, Japan. Source: “Japan Average Monthly Wages” www.tradingeconomics.com

However, Disposable Personal Income in Japan has in fact decreased to 356.21 Thousands JPY in November of 2013 from 401.14 Thousands JPY in October of 2013. Disposable Personal Income in Japan is reported by the Statistics Bureau, Japan Source: Japan “Disposable Personal Income” www.tradingeconomics.com

And now private universities have now announced their intention to raise university fees ranging from 20,000 to 200,000 yen(see article below), where families are going to be raising the shortfall in funds is a question that is going to be weighing heavily on all of parents’ and students’ minds, even as costs of living are clearly rising much faster than our wage earnings, thanks to the effects of “Abenomics“. See Japan’s Annual Inflation Rate Rises to Five Year High in November : The consumer price index for Japan in November 2013 was 100.8(2010=100), up 1.5% over the year and the highest since October of 2008.

Please, college dons and other authorities, do the math before you hike the fees. Help parents and students who have to fork out the fees out. Are Japanese graduates expected then to rack up college debts and head in the direction of US? See CNBC report on The college debt crisis “The debt that won’t go away”. I should really like to see a new kind of university rankings in place, one that has a large weightage and component based on how many students of the university are actually employed upon graduation. Maybe then, and only then will university policy-makers and authorities be forced to do the math along with the consumer of higher educational services.

Japan is becoming a lot like its closest ally, the US, and not in a good way … not only do the two countries have seemingly unsolvable huge national debts, it seems this country is also in imminent danger of digging another hole called the College Debt Crisis, one it will not be able to dig its way out of.

For students going to college, the consumption tax hike scheduled in April will not be the only increase they will face.

A Yomiuri Shimbun survey found that prestigious private universities, including Keio, Nihon, Sophia and Waseda, plan to raise their fees from April. Although the schools explained that higher fees are required to improve the educational environment and other matters, the amount of the increases seems to have an aspect of covering the universities’ cost burden due to the tax hike from 5 percent to 8 percent.

Of 39 private universities with more than 10,000 undergraduates, at least 13 told The Yomiuri Shimbun that they plan to raise fees.

Nihon University will raise tuition and other fees for new students at six of its 14 schools for the first time in eight to 17 years. The increases will range from ¥50,000 to ¥200,000 in the freshman year. Students entering some departments of the College of Bioresource Sciences will have to pay ¥1.66 million the first year, an increase of ¥200,000, or 13.7 percent.

“We had cut our expenses while seeing a drop in revenue due to a decrease in the number of students,” said a Nihon University official. “We have no choice but to raise the fees to enhance the educational environment.”

Waseda University has been raising tuition by 0.7 percent for new students every year since academic year 2006 and will continue to do so in the academic year beginning in April. The fee for the School of Political Science and Economics, however, will increase by ¥30,000.

Furthermore, students in most of Waseda’s schools will have to pay about ¥150,000 more over four years for its new global education fee, which includes expanded support for students studying abroad.

Though college fees concerning enrollment, tuition, facility equipment usage fees and others are tax-free, universities have to assume an increasing financial burden as a result of the hike in the consumption tax when they purchase supplies. One university expects an increase in costs of more than ¥2 billion in the new school year.

According to the Education, Culture, Sports, Science and Technology Ministry, tuition at private universities increased by ¥12,000 on average in the 1997 academic year, when the consumption tax was raised from 3 percent to 5 percent. “I assume that the consumption tax hike to 8 percent has prompted some universities to decide to raise fees,” said Keio University Prof. Takahiro Ueyama, an expert on university management. …